Microsoft laid off 10,000 workers in response to tech sector job losses
Microsoft will be laying off 10,000 employees, nearly 5% of its workforce. This joins other tech companies who have reduced their pandemic-era expansions.
The company said in a regulatory filing Wednesday that the layoffs were a response to “macroeconomic conditions and changing customer priorities.”
According to the company, it will also make changes in its hardware portfolio and consolidate its leased office locations.
Microsoft is cutting far less jobs than it did during the COVID-19 pandemic. It responded to a boom of demand for its cloud computing services and workplace software, as well as a boom in home-studying and working.
Microsoft’s workforce expanded by about 36% in the two fiscal years following the emergence of the pandemic, growing from 163,000 workers at the end of June 2020, to 221,000 in June 2022.
The layoffs represent “less than 5 percent of our total employee base, with some notifications happening today,” CEO Satya Nadella said in an email to employees.
“While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” Nadella said. He emphasized the importance of building a “new computer platform” using advances in artificial intelligence.
He said customers that were accelerating their spending on digital technology during the pandemic are now trying to “optimize their digital spend to do more with less.”
“We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” Nadella wrote.
Other tech companies are also available. trimming jobs amid worries about an economic slowdown.
Amazon and Salesforce, a business software company, announced job cuts earlier this month as they reduced payrolls that had grown rapidly during the pandemic lockdown.
Amazon announced that it would be reducing approximately 18,000 jobs. It’s the largest set of layoffs in the Seattle company’s history, although just a fraction of its 1.5 million global workforce.
Meta, the parent company of Facebook is making 11,000 layoffs. That’s 13%. And Elon Musk, the new Twitter CEO, has slashed the company’s workforce.
Nadella made no direct mention of the layoffs on Wednesday when he put in an appearance at the World Economic Forum’s annual meeting happening this week in Davos, Switzerland.
When asked by the forum’s founder Klaus Schwab on what tech layoffs meant for the industry’s business model, Nadella said companies that boomed during the COVID-19 pandemic are now seeing “normalization” of that demand.
“Quite frankly, we in the tech industry will also have to get efficient, right?” Nadella said. “It’s not about everyone else doing more with less. We will have to be able to do more with fewer resources. So we will have to show our own productivity gains with our own sort of technology.”
Microsoft didn’t immediately respond to questions about where the layoffs and office closures would be concentrated. It employed 122,000 people in the United States and 99,000 around the world as of June.